Subsidies in the agriculture sector are used as a tool to encourage a positive behaviour shift among farmers, leading to sustainable and structural changes in agriculture.
The Punjab Government is cognisant of the need to make subsidies supportive and targeted for the agriculture markets to facilitate growth while ensuring transparency. Historically, the subsidy programmes introduced for the farmers of Pakistan and around the developing world created market distortions and inefficiency. These interventions reduced other investments required to enhance agricultural productivity and assigned unsustainable fiscal burdens on the governments.
The Punjab Government is prepared to avoid the mistakes of the past by implementing technology-based subsidy disbursements, which are designed to target marginalised farmers in specific and support the growth of the overall agriculture sector. The Punjab Government has planned their use as a catalyst for change by incentivising the adoption of the best agronomic practices, promoting the use of better production technologies, encouraging climate-smart agriculture, and supporting a shift in crop mix. Through this unique platform, the government aims to provide an immediate discount on input, production and harvesting needs of the farmers rather than giving a cashback after expenditure.
Previously, the e-voucher programme facilitated the subsidy disbursement on fertilisers and certified seed. With the launch of the technology-based platform in the shape of the Kissan Card, a comprehensive model is facilitated where funds will be directly transferred to the farmer’s mobile banking account using a digital system. Initially, the platform is piloted on fertilisers and certified seed for the registered farmers of Multan. The programme is recommended for a scale-up at the provincial level for efficient, targeted and direct-to-farmer disbursements of subsidies. The Kissan Card will facilitate the provision of subsidy on the purchase of fertilisers, especially on phosphorus and potash fertilisers. The intent is to promote the balanced application of fertilisers. This way the cost of production can be brought down while the yields per acre can drastically improve. Another advantage anticipated by leveraging a Kissan Card is to promote the cultivation of more lucrative crops by the farming community, a shift away from the traditional cash crops.
The added convenience to the farmers through the Kissan Cards is that apart from being operational at the selected vendors for the purchase of fertilisers and seed, it can also be used at ATMs. Currently, the Punjab Government has planned to offer a cash subsidy amounting to Rs500 on the highlighted fertilisers. However, Prime Minister Imran Khan in his speech at the inaugural event in Multan directed to increase the subsidy to Rs1000. The government of Punjab has piloted the scheme in Multan with a limited number of farmers for now. For the future, the government has planned to scale up the scheme gradually to all the districts of Punjab.
Kissan Card is a unique platform offered to the farmers of Punjab, which will integrate more programmes in the future, gradually servicing the neglected community. Integrated with NADRA and land record authorities, the Kissan card provides an actual identification of farmers and helps to classify them accordingly. The classification according to the land owned or cultivated by the farmers ensures that the subsidy is targeted to a specific segment rather than the whole community in general.
Going forward, more programmes that can bring the cost of production down for the farming community will be integrated with this unique platform. The subsidy on diesel can be integrated to ensure it only reaches the intended beneficiaries through the Kissan Card. This will help as irrigation and cultivation expenses of small commercial farmers will be reduced. The Kissan Card can eventually provision subsidies on the purchase of certified seeds for all crops ranging from oilseed, pulses to horticulture. Through the Kissan Card, transparency will be encouraged in subsidy disbursement and eventually improve the yields per acre of the farming community. The subsidy will be bundled with digital extension and advisory services to support farmers transition from conventional crops to high-value crops and they will become more competitive and also increase their profitability.
Furthermore, the provision of subsidy on rental charges of farm mechanisation services, including for laser land levelling, tillage, inter-cropping, mechanical spraying, seedbed preparation etc can be dovetailed with the Kissan Card. The objective again is to increase yield by encouraging the usage of proven but less popular farm mechanisation technologies among farmers. The card also envisions providing agriculture credit at discounted rates to the small and marginalised farmers. Ensuring the harvest for farmers of Punjab is another critical yet vital proposal for the Kissan Card, safeguarding the small and marginalised farmers against climate change. Efforts intended with the collaboration of the State Bank of Pakistan and Securities Exchange Commission of Pakistan are intended to reduce the cost of production for the small and marginalised farming community by leveraging targeted subsidy through a unique platform.
The Reserve Bank of India (RBI), along with the National Bank for Agriculture and Rural Development (NABARD) initiated the concept of Kissan Credit Cards (KCC) in 1998-99, in order to assist agriculturists of India to have easily accessible cash-credit facilities. The card available in India currently is integrated with more than 480 schemes of 62 Ministries. Interestingly, only 36 direct benefit transfers schemes and services are from agriculture proving there is no limit to connectivity across governmental divisions and departments. The card also offers mobile-based transfer on transactions at agricultural input dealers and Agriculture Market. Eventually, the Kissan Card inaugurated in Multan aims to expand by integrating with more schemes in and outside the Agriculture Department. Gladly, with Pakistan making headways on FATA, the Kissan Card will prove to be a torchbearer in documenting the enormous rural economy mostly operating on cash. To register for this programme, farmers just need to visit their nearby agriculture extension office.